If Total Liabilities Are $22,000 and Owner's Equity Is $17,000

question 101

Multiple Choice

If total liabilities are $22,000 and owner's equity is $17,000, the total assets must be

• A) $39,000.
• B) $5,000.
• C) $20,000.
• D) $17,000.

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Definitions:

Physical Inventory Count

A process of counting actual inventory to verify the quantity on hand, usually performed at the end of an accounting period.

Inventory

Inventory consists of the goods and materials a business holds for the purpose of resale or production.

Long-Term Asset

A resource that is expected to provide economic benefits to a company for more than one fiscal year.

Balance Sheet

A financial overview presenting the resources, obligations, and equity of shareholders of a company at a specific point in time.